Mastering the blocks: A guide to Blockchain variants

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Blockchain’s decentralized nature powers apps, making it a widespread technology today. People’s trust has grown as a result of blockchain technology’s rising popularity and intriguing inherent qualities.

It is being widely adopted globally in several sectors. But there’s a lag between growing demand and blockchain’s actual use.

This conflict stems from a lack of awareness and comprehension of blockchain development.

What is blockchain technology?

A blockchain is fundamentally a distributed ledger that keeps track of transactions via a network of computers.

These transactions are compiled into blocks, which are connected by an unchangeable, chronological chain. It is this structure that gives rise to the term blockchain.

So, what is blockchain technology? Blockchain is a system that stores transactional records that are accessible to the public across several databases inside a peer-to-peer network.

Usually, this type of storage is called a digital ledger.

Blockchain variants

There are different types of blockchains online. Every type has unique characteristics and applications. The variants include:

Public blockchain

Public blockchain technology is the first variant of blockchain technology. This is the source of cryptocurrencies such as Bitcoin, which contributed to the adoption of distributed ledger technology (DLT).

It eliminates the drawbacks of centralization, such as decreased transparency and security. 

Information is not stored in a single location by DLT. Rather, it disperses it among a network of peers. Because it is decentralized, there has to be a way to confirm the legitimacy of the data. 

Using a consensus algorithm, users of the blockchain come to an understanding of the ledger’s present state. Two popular consensus techniques are proof of stake (PoS) and proof of work (PoW).

Public blockchain technology is permissionless and non-restrictive. A blockchain platform allows anybody with an internet connection to register as an authorized node. 

You may perform mining operations, which are intricate computations required to validate activities, add them to the ledger, and access both historical and current data. 

No transaction or legitimate record on the network can be altered. Since the source code is often available, you may examine the transactions, report errors, and suggest modifications. 

Applications of a public blockchain

For public blockchains, mining and trading cryptocurrencies like Bitcoin are the most popular use cases. It may also be used,

nonetheless, to establish a permanent record with a verifiable chain of custody. This can involve notarizing affidavits electronically and public property ownership data. 

For businesses like non-governmental organizations, which are based on trust and transparency, this kind of blockchain is perfect.

Given that the network is public, private companies should probably avoid it.

Private Blockchain

A private blockchain is managed by one organization or operates in a controlled setting, such as a closed network.

It functions similarly to a public blockchain network as it is decentralized and makes use of peer-to-peer connections. This kind of blockchain operates on a very small scale, though. 

Private Blockchains are usually run on a limited network within a corporation or organization rather than being open to everybody who wants to join and contribute processing power.

They go by the names business blockchains or permissioned blockchains as well. 

Applications of private blockchain

Private blockchains are perfect for applications where the blockchain has to be cryptographically secure because of their speed.

The regulating body, however, is opposed to the public having access to the data. Businesses may decide to use blockchain technology, for instance, without ceding their competitive edge to other parties.

Private blockchains can be used for audits and trade secret management.  Internal voting, asset ownership,

and supply chain management are some additional applications for private blockchain technology.

Hybrid blockchain

Companies will occasionally desire the best of both worlds. They want to employ hybrid blockchain, a kind of blockchain technology that blends aspects of public and private blockchain.

 It enables businesses to set up a public permissionless system in addition to a private, permission-based system.

This gives them the ability to decide which data will be made publicly available and who may access certain data that is recorded on the blockchain. 

In a hybrid blockchain, records and transactions are normally private but may be validated upon request, for example, by granting access via a smart contract. 

Although protected inside the network, confidential information may still be verified. The hybrid blockchain may be owned by a private entity, but it is unable to modify transactions. 

Joining a hybrid blockchain gives you complete network access.

Other users cannot see who you are unless you interact with a transaction. The other person is then made aware of your identity.

Applications of Hybrid Blockchain

Real estate is one of the many robust uses of hybrid blockchain. Hybrid blockchains allow businesses to operate systems in secret while making some information, like listings, publicly visible.

Retail may use hybrid blockchain to improve efficiency in its operations. Financial services and other highly regulated markets can profit from its use as well. 

A hybrid blockchain can be used to store medical records. Random third parties cannot access the record, but you may retrieve your data using a smart contract.

It might also be used by governments to securely communicate citizen data throughout entities while keeping it private.

Consortium blockchain

A consortium blockchain, often referred to as a federated blockchain, is the next variant of a blockchain. Because it combines elements of both public and private blockchains, this is comparable to a hybrid blockchain.

However, it differs in that it is a decentralized network where several members of the organization work together. 

A consortium blockchain is essentially a private blockchain to which only a certain set of people has access.

By doing this, the hazards associated with a single party running the network on a private blockchain are removed. 

Preset nodes govern the consensus processes in a consortium blockchain. Its validator node is responsible for initiating, receiving, and validating transactions. Nodes that are members can send and receive transactions. 

Applications of Consortium blockchain

There are two applications for this kind of blockchain: payments and banking. A consortium made up of many banks can decide which nodes will verify the transactions. 

Similar models can be developed by research institutions and groups that wish to monitor food intake. It’s perfect for supply chains, especially for applications involving food and medication.

Permissionless blockchain

A public blockchain that allows anybody to join the network as a node is known as a permissionless blockchain. Blockchains without permission are frequently employed in decentralized applications. 

Applications may be created, deployed, and used without the assistance of intermediaries. A few advantages of permissionless blockchains include their extreme openness, decentralization, and security. 

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